Here in the U.S. and all Anglo-Western legal systems, condemnation or expropriation requires compensation. You can’t take people’s stuff without paying for it, even if you are the sovereign.
Not so much in other parts of our planet. For a fascinating look at the economic realities and impacts of outright seizure of property, take a look at the D.C. Circuit’s opinion in Helmerich & Payne Int. Drilling Co. v. Bolivarian Republic of Venezuela, No. 13-7169 (May 1, 2015).
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Helmerich had operated oil and gas drilling operations in Venezuela (the only non-Middle East founding member of OPEC) for over 60 years, including leasing equipment through subsidiaries to the Venezuelan National petroleum company (PDVSA). When one such Helmerich subsidiary began disassembling the drilling rigs leased to PDVSA due to PDVSA’s falling nearly $63 million behind on lease payments for drilling equipment, Venezuela reacted as only a sovereign can.
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The Foreign Sovereign Immunities Act generally protects foreign nations from suit in U.S. Courts except in certain circumstances. One such exception is forcible expropriation.
As with all Nationalistic Dictatorships, Venezuela couldn’t keep its mouth shut, issuing press releases such as statements by the president of the Venezuelan Committee on Energy and Mines:
criticiz[ing] opponents of the nationalization for acting “in accordance with the instructions of the [U.S.] Department of State” and trying to “subsidize the big business transnational corporations, so that they can promote what they know best to do, which is war . . . through the large military industry of the Empire and its allies.
and official National statements like:
[Venezuela] emphatically reject[s] statements made by spokesmen of the American empire—traced [sic] in our country by means of the oligarchy.
A few weeks after the blockade, the Venezuelan National Assembly issued a statement making the seizure pretty clear. In a comically titled “Bill of Agreement” the government proclaimed
[Helmerich’s] property to be “of public benefit and good” and recommending that then-President Hugo Chavez promulgate a Decree of Expropriation. President Chavez issued the decree, which emphasized that “the availability of drilling equipment [such as Helmerich’s] is very low both in the country and at world level, and the lack thereof would affect [Venezuela’s national oil drilling] Plan.” The decree directed PDVSA to take “forcible” possession of H&P-V’s drilling rigs and other property.
Id. at 5.
Two eminent domain lawsuits filed in Venezuelan Courts resulted in failed service of process and an indefinite stay on the second. Helmerich and its subsidiary, seeing this was going nowhere, brought suit in the District Court for D.C. alleging a taking of property in violation of international law, claiming jurisdiction under the expropriation exception to the Foreign Sovereign Immunities Act.
In denying Venezuela’s motion to dismiss, the Court held that Hemerich was a foreign citizen, as corporations are nationals of the state under the laws of which the corporation is organized, an important holding since “generally, a foreign sovereign’s expropriation of its own national’s property does not violate international law.” Id. at 10. Put another way:
What another country has done in the way of taking over property of its nationals, and especially of its corporations, is not a matter for judicial consideration here. Such nationals must look to their own government for any redress to which they may be entitled. Id. at 10 (quoting U.S. v. Belmont, 301 U.S. 324, 332 (1937)).
Venezuela’s repeated propaganda relating to this seizure referencing ‘imperialist Americans’ ultimately was its undoing. International law makes clear that singling out aliens of a particular nationality’ for discrimination violates international law. The Court, in ruling that the pleadings for a motion to dismiss must be viewed in a light most favorable to the plaintiff (Helmerich) held that the complaint alleged sufficient facts, particularly those relating to Venezuela’s statements singling out Helmerich as American, for the Court to accept jurisdiction and continue to consider the case.
Helmerich has a long way to go and multiple additional hurdles to jump before a compensable expropriation claim can go before a judge or jury to determine compensation owed.